TIM CHEN: Let me introduce another person who also had a dream. That dream is to create a company that would try to change the world with software and technology. And today, Mr. Bill Gates, and Microsoft, we have had the pleasure to see that dream realized. Today over 600 million people around the world are using Microsoft software, and have experienced the power of the computer. This is incredible progress, and we also understand the enormous responsibility that comes with that progress. And Microsoft has been thinking about how to continue to fulfill our responsibilities in a way consistent with the original vision to change the world, to live up to our commitment for inclusion, and changing the lives of those we have reached or touched.

Bill has come to China many times. China is a country that exemplifies so much of the potential we see in many of the emerging markets around the world, and Bill has come to provide at this time Microsoft’s thinking of where we’ll go for the next step. So with that, welcome Mr. Bill Gates. (Applause.)

BILL GATES: Well, good afternoon. It’s great to be here in Asia where there’s so much dynamic growth, so many exciting things going on. And it’s great to have this group together to talk about how governments play a key role in driving the information revolution within their countries, using technology themselves to be more efficiency, to be more transparent, to deliver better services, and then providing key policies for the investments, particularly in education.

If you look at one thing that really explains the dynamic growth in these Asian economies, I think we can look to education and the commitment to that is one of the key factors that has allowed things to develop as well as they have. As we think about the next ten years, the advances in technology are going to create even more opportunities, and we’re going to revolutionize more activities than ever before. The technology will be lower cost as the prices constantly come down, and it will be much easier to use because instead of just working with a key board in the years ahead, the machine will be able to take ink as an input. It will have a tablet device that you can just write on it, and send your ink to other people, or have it be recognized. You’ll be able to use speech. The computer will even have a camera and be able to tell who is participating, who is talking, and see exactly who is there, so that it can offer up all the right options.

This idea of natural interface, smaller devices, means that computing will be very, very pervasive. Now, of course, a big beneficiary of all these advances will be the people who are using computing today. They’ll be able to work at a distance better than ever. They’ll be able to navigate information and find trends better than ever. They’ll be able to move in-between devices, from their phone, to their PC, to another PC, and all their information will be there for them. Getting insights into sales results, or quality will be far better. And so the benefit of more advanced software will be quite incredible.

But another goal we should have is to go beyond helping the billion people who use technology today, and bringing that to the other 5 billion. Now, that will take time, and there are many priorities, many things we need to do to drive equity on a global basis. But one of those over time is to make sure that access to technology, to the information and the empowerment that’s being developed on the Internet, that every kid and everybody who wants can have access to those capabilities. With technology moving so quickly, this is within our reach. We have to plan for it. We have to think about the infrastructure and the training. We have to think about how we finance these things, and maintain the quality. And we have to think about the whole problem. It’s not just the cost of the PC, but rather these issues of connectivity, of the training, the maintenance, the support, all of those have to come together, and most of those are actually more difficult, and more expensive than just the hardware piece.

The magic of software is something that we’ve believed in for a long, long time. Microsoft is now over 30 years old, and the original dream was about computers for everyone. And so that says that as we go after this next 5 billion, it really is going back to the original roots, the original commitment of what Microsoft is all about. In the years ahead, computing will change the way we think about education. The chance to go up online and see the lectures from the best universities in the world, the chance for a teacher to go up and see another teacher teaching the course, and doing it in the best way possible, the opportunity to go up and find materials that will make the course interesting to the students, those things are all going to be just standard capabilities that we take for granted. And things that we used to think of all being together in education will, in some ways, separate out.

When we think of a university, we think of giving lectures, we think of doing study groups to help with the materials, and we think about testing to really certify that somebody has a degree, that they have a certain skill set. Well, as we use the Internet and digital approaches, the lectures will be there and a very few universities can provide either for free or at low cost, and so that piece others should not feel the need to duplicate, because it will be much better to use what’s already there. Likewise, the certification, the actual testing of knowledge can be delivered in a very efficient digital form. So that leaves creating the environment where the teacher and the students are working together and interacting. Today that is best done on a face-to-face basis. But over time even some elements of that can be done over the Internet. There was an interesting study done where some students watching university lectures were actually at the university, and some others were at a remote facility. What they did at the remote facility was, they stopped every 15 minutes and let the students discuss the topic among each other, and they wondered where would the learning be best? They were worried that actually not being at the lecture might be some problem. In fact, it was the remote group that could stop and discuss things whenever they wanted, because it was stored, and they could start and stop, actually that was the group that did the best. So education really is starting to change. Sharing best practices, getting the richness of the Internet, and we’ll see that in many places.

An announcement that Microsoft is making to help push this forward, we call our broad program where we allow software donations for computing to be used broadly, we call it Unlimited Potential, and that’s because our overall story is about empowering people to reach their potential. Of course, that’s touched on many things around the world. In each country it’s tailored to the particular things that we hear from the government and the citizens they’re interested in, but it’s always to do with education, to do with innovation, and creating jobs in that environment. We have a business group that focuses on this with Will Poole and Orlando Ayala, who are really looking at how we can take the best practices, the great results we’ve had, and make sure that we’re sharing those on a worldwide basis.

Education is the most important investment for the future, an we’ve already been able to have a significant impact. In China, our computer labs are reaching 11 million middle school students. We’ve been able to train 2.6 million teachers on a global basis. And we’ve got to drive this forward. Technology is going to be a critical element of the classroom experiencing, having a machine, even though it’s shared, that students can get on and work with, and having the teachers, and the curriculum, and all the elements that connect up to that.

An announcement we’re making today is for the new offering we call Student Innovation Suites that for a nominal price of US$3, for any time where the government is actually buying the computers themselves to give to students, we provide a whole suite of software, including Windows XP Starter, Microsoft Office Home and Student, Microsoft Math, Learning Essentials for Office, and a mail package, all of those things for the $3 offer. That’s to address where the government is actually buying the hardware, and they’re to work on any system that can run Windows. And so we’ve seen great work from partners. Intel has made some big advances in new hardware. AMD is making advances. Companies like HP and Dell are doing work there as well. And so the innovation of our hardware partners together with an offering like this, together with governments that are offering things will really come together as a way of driving a number of these projects forward.

I mentioned education as an area of incredible advance. We can look at almost every type of endeavor and say that the digital revolution will change it. We can look at banking, and say that by having the data online and using the cell phone, things like micro-finance over time will benefit from this, micro-insurance, micro-savings. How do you identify yourself, just using your fingerprint on the cell phone, so that’s a very reliable system. These are things that are at an early stage, but even for people in developing countries using digital technology to allow the overhead costs for many services to be far lower, that’s a real focus that we have.

If we think about meetings today, in business we have lots of meetings, we have to travel and meet face-to-face. More and more we should be able to over the Internet share documents, edit them together, share video if we want, talk to each other, and have it, because it’s Internet-based, have almost no extra cost for doing that. So making the world a smaller place, and allowing people to work together and collaborate by connecting up over the Internet, there is software to be done there. The classic phone system will go away, the standard PBX will go away, and it will just be a phone connected to the PC, which is connected to the Internet, and the user interface can be far better because you can use the large screen. Things that have been difficult today, like setting up conference calls, or actually impossible like knowing who called you while you were gone, or saying that if certain people call you, you can let them pick open times in your calendar when they might want to call you back, or meet with you. All of those can be enabled as we get the full power of software on the Internet together with telephony. And yet, here again, we can save lots of people lots of money. They don’t have to buy that separate PBX system, they don’t have to think of it as something separate. If they’re out of their office, the ability of the call to reach them is far better than in that traditional world.

Now the software industry has grown, and we’re very proud of that, because we measure ourselves by creating success for our partners. In Asia, there’s about for every dollar of business we do our partners do about $12. So if we can grow them, that’s a key factor in growing our own opportunity.

We want to create that opportunity for large companies and small companies, new innovators. One example of how we do that is we have for students contests where they can develop ideas and submit those. We have what’s called the Imagine Cup, and we have over 100,000 students registered for that this year, still more will be registering, and actually Asia is where we see the highest level of sign ups.

Many of the projects that have been submitted to that have gone on to be the basis for starting up new companies. They have startups that are formed around the contest work that was done there, and it’s fantastic to see that, in fact, as part of our award program. We help them with the marketing, we help them with some of the efforts to get going.

We’re creating what we call more Innovation Centers, which are places that developers can come in and get advice, use hardware they might not be able to buy themselves. Today around the world we have about 110 of these, and we’re committing to grow this over the next couple of years, so we have over 200. We’re adding a lot of places for software developers to come in and have access to things, including partnerships and learning, that wouldn’t be available elsewhere.

We have great examples of companies like Heulabs in Singapore, that have grown out of these Innovation Centers, and it’s very gratifying. In that case it’s actually an application for my favorite Windows product, which is the Windows Tablet. The Tablet device that’s smaller than a portable machine, very thin, with that wireless Internet connection, which over time will mean that students don’t need to have textbooks, that the cost of that device will actually be less than the textbooks, and yet the experience of using it, the interactivity, the note-taking, the browsing the Internet, watching videos is dramatically superior to what you would have had if you had a paper-based experience.

So what Heulabs did is they did some software for the tablet that has been used in countries around the world, over 140 different schools. So it’s just one example of success and jobs that come out of an innovation center.

In terms of creating jobs, obviously technology is a growing sector. It’s the sector that will continue to grow. There’s a shortage of great engineering skills, skills worldwide. In fact, in many of the richer countries the number of people going into engineering is going down. So that’s partly why there’s opportunities for the countries where the science and engineering programs are still very strong. Most of those countries are here in Asia, and the world will benefit from the skills of those students.

We’re creating in India an employment portal, to let students go up and check their skills, see what additional skills they need to get, see where the jobs are, be able to reach out to curriculum that partners develop there, and that will be an excellent way of using technology to empower people. Of course, as that’s successful we’ll do like we’ve done with all of our government-related projects, we’ll take the experience, we’ll write it up, we’ll actually take the source code of what we do, put it up in a library that’s available, so people can have a quick start if they want to do it themselves, they want us to help out and do that.

That’s been true for many government projects, like The Portal Project where you connect all the different departments together into one Web site. We’ve been able to do those projects very rapidly, because we’ve done them now for many dozens of countries, and so the effort to take the existing software, without changing it, where it doesn’t know it’s connected to the Internet, it just thinks it’s traditional interface, but the software connects up and takes that information, and puts it in a Web format, using a Web services approach. We’ve now done that enough times that for us or anyone else to do a portal has gotten to be a very straightforward thing.

When people think about these software projects, historically they probably thought about projects that were many tens of millions of dollars, and two to four years in time. With the advances in the development tools and building on similar applications that have been done, it would be very unusual nowadays for a project to run more than a small number of millions, and to run more than, say, 18 months. So the ability to prototype what needs to be done, look at the users, get their feedback, constantly be improving it, instead of going through a very complex procurement and design cycle, now software is so much better that things can be done very quickly.

In fact, any government Internet system, one nice thing about it is you’re constantly getting feedback from users. You can see what pieces they use, so the people who are using it you can survey them, ask them what was complicated, and why did they like it, what didn’t they like, and go on and drive up the traffic, drive up the satisfaction that people get from those things.

I’m often asked, is the technology revolution going to reach an end, the improvement in the chips and the software will that start to slow down as we reach some limit? And the answer is, certainly in the decades ahead, we don’t see any limits. We see the fact that the power will just get better and better, and already these machines, even the very inexpensive Windows Server-type machines, are far more powerful than the most expensive mainframe or other non-standards type system.

The government database, whether it’s every citizen, or a photograph of every citizen, the hardware required for that today is very, very inexpensive. In fact, for those projects the key is to make sure that you have the right software tools and training, that you’re doing the interface the right way. That’s the only important part of the project, not skimping on hardware, because that will not be a software challenge in pulling that system together.

We really see no limits in terms of bandwidth connecting systems together. In fact, new wireless approaches will let us reach out into rural areas, let us have very good, high bandwidth, without wired systems. We see TV changing to use the Internet, because now we have enough bandwidth to do not just normal video, high quality video, which is where things like the educational lectures I talked about come in, but also movies, or business meetings, or video of any type. That’s certainly new for the Internet.

Five years ago we talked about music on the Internet, we talked about photos on the Internet, but video was not a mainstream thing. Today it’s very mainstream. Why? The power of the systems, the power of the software tools, and the use of high speed connections allowed that video to work very well on every one of these systems. So that’s going out and being used in many different ways, some very serious, important things, like education and training, some more frivolous, in terms of people posting entertaining videos, and being able to find those and share those. And that’s great.

The Internet has always had a mix of something that you use at home, something that you use at work, something that you use in education. And having it be one standard, the classic PC interface, whether it’s Windows or Office, the browsing interface, the standard protocols of the Internet, having that all be essentially a global thing that people can expect is very valuable. Anywhere in the world you go, you go into an Internet kiosk, you sit down, you’re going to be very familiar, whether it’s creating a document, or a spreadsheet, or doing electronic mail, these tools have become very standard. We’re making them far richer, for things like collaboration, business intelligence, a lot, lot richer.

These are the tools that will continue to allow scientific progress to accelerate, whether it’s clients for designing products like cars or planes, or whether it’s science for designing new crops, understanding the genetics, and how we do breeding, or other techniques to make improvements there, how we study data and make breakthrough medicines. Really the Internet and software are the enabling factors that are letting people all over the world share information, connect up, and gain understanding at a far more rapid rate.

As I said, a centerpiece of this is absolutely education and what goes on in that space. And we’re seeing a lot of ways that the hardware can change, a lot of ways that we can use new approaches. And I think these ideas will probably be first used throughout the countries in Asia, because as I mentioned, a strength, an incredible strength of all these countries, no matte what stage of development they’re at, is the interest in, and commitment to education.

We believe that Microsoft has a role to play in this. The new announcements today, like the Student Innovation Suite, for government projects, some of the things we’re doing around the Innovation Centers, all of those are elements, and they build on what we’ve been able to do. The fact that we can provide the great software, and some money for training, the hardware are becoming more and more feasible allows us to reach out and talk about this next 5 billion.

It won’t happen overnight. We’ll need to deliver through not only PCs, some things we’ll need to deliver through cell phones, through TVs, and so we have to be very creative about that. We have to let people author material, let teachers edit the course material themselves, without understanding a lot of technology. So in every language, for every subject, it’s easy to build it up, and it doesn’t rely on a global company to do that. A local entrepreneur can take and absolutely do those things.

So we always come back to education as a very key thing. This is how every citizen in the world has a chance to realize their full potential, and it goes back to something I said in The Road Ahead, the book I wrote now well over 10 years ago, and I said at that time that if you wanted to understand somebody’s economic opportunity, the one thing that would best predict that would be what country they were in. Very rapidly that’s changing, so the one thing that best predicts their opportunity is what level of education they have received. And so anyone, no matter where you are in the world, who’s got a great university education, essentially through the Internet, to some degree, jobs come to you, because there’s a shortage of that kind of top talent.

So this is raising living conditions everywhere. It will take a lot of time and it, in turn, needs to be used to help and make education more effective, to have a better understanding of what the student knows and the quality of that teacher, and helping those teachers do a better job. But, we’re very committed to this, we’re very excited about what’s going to come out of it. So I think you get a sense of why education is at the top of our list. But, for all these things we’re just at the beginning of what technology can do.

Thank you. (Applause.)

Well, now just to give you a glimpse of some of the new ideas, the new ways of using technology, particularly in education, I’d like to ask Craig Mundie, who’s our Chief Research and Strategy Officer, to come out and show us those things. And he’s got quite a few neat things. And then when he’s done, I’ll come back out with Dr. Yunus for some questions. Welcome.

CRAIG MUNDIE: Thanks, Bill. (Applause.)

Good afternoon, everyone.

As Bill said in his remarks, we have had a vision for some time about the role that technology can play in improving education for everyone on a global basis. And as we’ve expanded this Unlimited Potential activity, one of the big challenges in our mind is to try to help people understand how do I get started. And I decided that I would take 10 minutes this afternoon to some extent to give you a roadmap by talking a little bit about what we see as this ultimate future that we’re headed for, and how we think that the core computer technology will evolve to allow that, but then to bring that back, recognizing that over the time period that we’re trying to solve this problem of improving education, we will have an incredible dynamic range, from students in elite schools in wealthy countries to basically people in impoverished locations, with perhaps little capability for delivery of formal education in any traditional sense.

And so I hope you can walk away from these anecdotes with some ideas about things that actually could be done today, and that as you build on them you’ll ultimately end up with a spectrum of tools that will allow you to make some improvements.

One of the things that we clearly believe will happen in the future is that people will have better devices. And just to ground you in what’s possible today, and yet what steps have yet to be taken, this device is a small computer. It’s actually running Windows Vista, the latest operating system. Much like the latest cell phones, you can slide it open and it has a small keyboard under the bottom of it.

So this will basically be a computer for people not so much in education today, but for people like me, businesspeople who are willing to spend some significant amount of money, but who want a complete computing experience that is a little more capable than a cell phone but still quite a bit too expensive to think that it’s the basis of every student having one.

But, in fact, that is the vision that we have. This device is about two centimeters thick, weighs under a kilogram, but today still costs about a thousand dollars or so.

This is actually a model, a physical model of the device that the companies we work with in this space are now moving to make. This one is only about one centimeter thick, would weigh well under a kilogram, probably under half a kilogram, and you can see is largely a much more sophisticated display technology.

But as Bill said in his remarks, this is the class of computer that we hope will have its cost come down. And clearly the physics of the device and the capabilities of the device would make it an ideal vehicle for delivering this future educational experience. And the challenge is, how do we ultimately get devices of that capability into literally every child’s hand?

But under the assumption that that day will come, that just as personal computers and television and now cell phones have become very inexpensive and are permeating the society globally, we expect to see the same thing happen. And when it does, then the ability to have an educational experience not just in the classroom but at home, in transit, wherever you are, will continue to improve.

So, here you might see a device like this in the hands of a student on a subway. This would provide communication’s capability to their friends, the ability to review their course material as they go.

One of the things that we think will also happen is that displays will become more and more prevalent, and lower and lower cost, and that one of the opportunities we have is to recognize the potential to decouple the display acquisition in the form of a television or a VCD player or any of a variety of other devices from the acquisition of the total computer itself. Today, televisions were never designed to display computer output, but all future televisions, all flat panel display technologies, in fact, are designed to do that, and our ability then to couple these together in the home where you add a keyboard, a display, a little docking station means that the small computers you take with you can, in fact, be the big computer that you use when you want to do more creative projects at home.

In this era, we would expect that you’ll have communication and collaboration as an integral part of the experience, that children would be able to collaborate, just as today we’re starting to have businesspeople collaborate in real time. It will be much more prevalent to have voice annotation and other ways to have a multimedia component to the curriculum and the interaction that students have with that curriculum. And we expect that people will become facile with editing and creating their own multimedia capabilities. And we think it will be more and more likely that students will graduate from what they do today, which is to do PowerPoint demonstrations as part of their classroom work to where they would be taking photographs or videos and editing them and adding comments together in order to produce this capability.

We also expect that software will become sophisticated enough to provide individual tutoring. Essentially software in certain areas will become a capable tutor in specific subject matter. And when that fails, we can use the mechanisms that are being used on the Internet today, for example, to develop synthetic reputation and to qualify people as assistants, and be able to use these not to allow people to buy goods, but, in fact, to essentially buy or acquire tutoring services from the people that they may know or, in fact, not know.

And so all of this would be an ideal environment, but the question is how do we do things in a practical sense between now and the time where this future might emerge?

So, let me talk briefly about things that might happen tomorrow. And by tomorrow I mean in the next couple of years. We definitely think that we’ll start to see the emergence of low-cost, rugged laptop class devices, things that are designed to tolerate the stresses of being in the hands of small children or certainly high school aged children, and that the software suite that they’ll have available is like the one that Bill talked about today, that we’ve introduced for government supported projects.

And so whether people acquire them themselves, have access to them in school or are acquiring them through government subsidized programs, we think that this will give us an interesting capability to have a laptop class experience but at a much smaller cost and form factor.

And we start to see a number of activities from Intel and other places, which make us quite confident that this class of computer will emerge quite quickly.

But even that represents a significant cost burden for the families or the government or the school to try to provide. And so one of the things that Bill and I have talked about for about the last 18 months is the idea of really leveraging the power of the cell phone and the ubiquity of the cell phone as a way to move into computing in support of things, including education, using the cell phone as the basic computer.

Today, even a low-end cell phone has the power of what used to be a desktop computer less than 10 years ago. And so if we’re careful in how we design the software and the applications, it’s conceivable that on a cell phone the computational capability is sufficient, but, of course, the ergonomics are not appropriate for many tasks that people want to have.

But what we think is that we can now build economically the ability for a cell phone to basically dock with a keyboard and any type of display, including an existing television display. So a school might, in fact, be able to begin, if they had no other computation facility, to have a setup like this picture indicates, where you can literally take a cell phone, hook up a keyboard and a TV to it, and begin to give people an entry level personal computing experience that could be used for Internet access or limited types of curriculum capability. And so we think that that’s an interesting way to contemplate getting started.

But even before that might happen, or before the student, in fact, might have that cell phone and not just have it in a classroom but the ability to hook it up to a display or the family television at home, there are still other things that can be done, and I want to share with you some things that are not speculation but are, in fact, being done and delivered today.

There are three things I’ll share with you, and the first, Edunova is a collaborative learning system developed down in Santiago, Chile. The next is Windows MultiPoint, which is a new technology around multiple mice; and then a concept called Digital Study Hall.

Edunova is a program developed by Miguel Nussbaum at the Catholic University of Santiago, Chile. A few years ago, he said I can’t afford to buy big computers for everybody, but what if I gave them these small Pocket PCs, and I develop curriculum around that. But not just as an individual idea, but to use the technology to create collaboration under the assumption that collaboration would, in fact, be an equalizer in terms of how the children interacted with each other, and that they would begin to help each other, particularly in an environment where the teachers themselves were not very sophisticated.

And so he developed a capability where the kids were broken up into groups of three, and a curriculum that always operated in this triple sense. No student would be able to really advance unless their two partners could advance at the same time. They couldn’t deliver a solution to a problem unless each of them delivered their component of that solution. And the small devices fostered this type of collaboration.

And they’ve had remarkably good success with this. Even in one year they were able to see statistically significant improvements in outcomes around the different curricula they had used, and they’ve now been exporting this to other parts of the world.

So, here we can start with small devices, but with an innovative model of education, and make some interesting progress.

This inspired us a little bit to recognize that indeed collaboration is a very powerful thing, and is there an economical way that we can start people down this path.

So, the Microsoft Research people developed what we call MultiPoint, the ability to take individual PC mice, and instead of having one mouse per computer, be able to have essentially an arbitrary number of mice per computer. They’ve got one computer, one display, one keyboard, but a mouse per user.

And so what you see here in this picture of the classroom is a little projector — and you can buy them now for a small amount of money — hooked up to one personal computer, but each of those icons you see on this screen is actually a cursor that’s owned by a child who has their own mouse. And so their ability to essentially operate mice simultaneously on the screen has created a very, very interesting palette on which people are now creating new collaborative models of learning.

The children become very, very excited in using these things, and we have found that it tends to create a much more equal level of participation. And we can do things where they solve problems together, or, in fact, where they look at the screen and have been given ways of using the mouse to answer individual questions.

So, we can do everything from individual testing in a group environment to collaborative learning all by just adding a mouse. And so the mouse you could think of as the smallest incremental expense in which to give personal computing to everybody in a classroom.

And so each of these I offer to you as an example of a combination of clever hardware, clever software, and clever people who are thinking about new ways in which they can move towards this world of technology assisted education. And with that, we’re very, very confident that the results that can be delivered can be substantially improved. And so these things give us a great deal of excitement.

The last thing says, well, isn’t there something I can do even if I don’t have computers to give to everybody. And this is a project that we did in India called Digital Study Hall. What you see here is essentially a classroom with a teacher, but in this case what we’re doing is recording using just a standard Handicam the best teachers in each subject in each school district. And by recording them we wanted to make those lectures, as Bill said, available to all the people in the school. Many times it’s the teacher who has insufficient training in a particular curricula, or, in fact, is just not a great teacher or has not had sufficient experience.

And so the idea was could we take the best teachers, video them, and then find an innovative way to deliver the videos and use that as part of the learning process. The example Bill Gates talked about was done at the university level where the remote people actually had better outcomes because of their ability to pause and resume the playback.

And what’s actually already happened in these schools in India where this has been tried is that the teachers and the students benefit from exposure to these recordings of the best educators in their area. What was originally thought to happen was that the local teacher would just mediate the playing of the video lecture for the children, and in the early days that’s what they did, and then the teachers, the local teacher said, well, I can take this video home and learn myself, and instead of just mediating the playback, I can add some value and ultimately I can emulate these teachers. And so the teachers started to learn, as well as the students started to learn, and the results have been extremely promising.

So, here you need literally only a television and a DVD player, which arguably almost every school has or can afford in the poorest environments, and the question is how do you distribute it. Here we don’t even presume that we have the Internet in some sense to do it; we just have the mail system or local motorbike couriers. And the thing that makes this all possible now is the ability for an individual personal computer to be attached to these low-cost DVD replicators and to take these videos as home movies essentially, replicate them in volume, and then just put them in little envelopes and use the postal system to distribute them to all the schools. And by doing this we’re basically creating a network — we used to joke about SneakerNet in the old days of computing where we’d carry tapes around — and in a sense this is a motorbike network that is delivering DVDs. But again the early outcomes from this, the level of participation is very positive, and we’re very enthusiastic about this.

So, all of these things are technologies that are available today. They start at extremely low cost. And we think it allows us to have a spectrum of capability that can go from absolutely the poorest regions even today to the most sophisticated, and the technology will only continue to get better.

So, let me stop there, and ask Dr. Yunus and Bill Gates to come back and join me, and we’ll use the remaining time we have for a question and answer session with Bill and Dr. Yunus. Bill? Thank you. (Applause.)

So, in preparation, and I guess through the session, people here have been able to put forward some questions, and I’ve got a few of those things, in case they’re bashful and don’t want to come to a microphone. But hopefully we’ll get you involved in this a bit more interactively, and there are roaming microphones around.

So, if you have individual questions you’d like to ask now that you’ve heard their talks, please get your thoughts together and in a minute we’ll open the floor to the microphones.

Let me start maybe though with one question that was presented for Dr. Yunus’s consideration by quite a number of the delegates. The general question was, can you offer some thoughts about the role that technology can play in helping to eradicate poverty. Clearly the work you did with the banking was not technology dependent per se. Backstage you and I were talking about things like solar power and other things. What do you see as some of the other technologies that could play a role now in getting these people bootstrapped in this self-sufficiency model that you advocate?

PROFESSOR MUHAMMAD YUNUS: Technology plays a central role, very strategic role. No matter what you do, in which form you do, there’s a technology to boost it up, make it powerful. Even just look at the microfinance itself; if you bring technology, as Bill was explaining, how powerful it gets, if you take the cell phone and can bring financial services to the people right away.

And information technology, which will change the whole world, I mean, getting to the bottom level, the poorest level, and bring the technology in the hands of the poorer people will create a completely different kind of world.

Simply we are not putting our mind into that level yet. We are so mesmerized by the designs and things for people at the top. Those are all the designs that you have shown. These are all addressed to those same people, repeatedly, improving one step, more steps, and a few more steps, but nothing yet to this beggar woman who sits in the street.

What information technology can take her out of that begging and be a self-earning system? How young people looking for a job can change his or her life with information technology, without being subservient to somebody else? Like if I could create a company which can not only find my job, and I create more jobs with information technology, if I can do that, the very orientation, job orientation itself is a wrong orientation. Why young people come out of schools to look for jobs? Why can’t they say I will never seek any job from anybody, I will create jobs. That’s where the creativity part comes in, and technology helps that.

So, I would put this as central. And you said about the renewable energy and other things, other kinds of technologies, all kinds of technology, but again the core technology I still see to change the world is information technology, a manifestation of it, not just one manifestation, which you have been talking about, there are thousands of manifestations of how you do that.

CRAIG MUNDIE: Thank you.

One other common theme that I’ll present for Bill’s consideration, everybody I think recognizes that alleviating poverty perhaps has its genesis in education. The Internet and many of these other things may play a role in that. It says, however, the issues of high cost and system congestion related to connectivity, leading to low speeds and high cost, may severely impede the realization of this inclusion that might come. What ideas do you have that might really lower the cost of connectivity in these poorer or rural environments?

BILL GATES: Well, there are several things that should be able to help us there. The first is bringing together the mobile world and the Internet world, and thinking of those as one world. And so when you run optic fiber into a village, and allow it to connect up to wireless base stations, that will be for PCs to connect to Internet, and for phones to connect to both voice services and to the Internet, so we can bring those together.

The wireless technologies are actually advancing quite rapidly. Intel’s a big believer in WiMAX. There are other forms of that. Even today’s 3G networks you can often get anywhere from 40k to 100k baud connection up to the Internet. And now for high quality video that’s not good enough, but if you just want to do a low quality video, like a videoconference, if you want to see any text pages, which for a farmer looking at prices or markets is adequate, then that works very, very well.

What we need is a tiered approach where everybody can get in at some way of doing Internet connection, and then as they are advancing, it’s easy without them learning something new, without buying totally new equipment, to get up to that higher speed connection.

In fact, one of our partners in India, Reliance, is talking about running fiber to provide a new type of TV infrastructure, and then it just comes for free that you get the Internet capability there as well.

Some of the things you reminded me that the things that CK Prahalad has written about, where you think about products, both cost reducing what we have, but also designing in a very simple way, and I think the IT sector is going to have both of those dynamics taking place.

CRAIG MUNDIE: Okay, anybody in the audience have a question they’d like to offer up now? Keep thinking. I’ll keep going then. I have most of your questions anyway.

Another question, Bill, for you was what’s the vision and strategy for Microsoft in healthcare through the year 2020? Do you think that these technologies will be able to facilitate things like personalized genomic medicine, and will that make a difference in the healthcare of the future?

BILL GATES: Well, healthcare I’d say is right up there with education as a tough area, a growing area, where we have to think about how the rich world is going to change in what it’s doing in healthcare, and how we bring more equity and more capability into the developing countries.

From a technology point of view, Microsoft is putting a lot into healthcare. In fact, under Craig’s management we have a new business group, which is our healthcare business group. We just saw so many places where we could come in and do a little more of a specific solution, either for hospitals or for consumers, that we’re trying out some new things there.

If you look at the developing countries, that’s more where I’ve gotten involved with my foundation, looking at a lot of the disease problems that because the richer countries weren’t thinking about them, that there was no established market. And so the amount of investment in something like a malaria vaccine or tuberculosis vaccine or certain childhood diseases, there wasn’t the right investment there.

And yet as we get those advances, as you improve health outcomes, it’s very well established that that actually lowers — ironically, and people were surprised about this in the 1970s where they discovered this — that actually reduces family size. So, population growth goes down as the certainty of a parent that their children will survive into adulthood and be able to take care of them, as that goes up, you actually reduce population growth. So, these healthcare interventions can have a very big impact.

In terms of technology, we’re already seeing consumers going out and learning on the Internet about what’s going on. They need some more trusted sources for that information. There are people who are doing telemedicine, medicine at a distance, where every country has a challenge that it’s hard to get the experts to live in the rural areas. And so often that Internet connection approach will come in and play a role there.

I do think that biology will be advancing because of our understanding of genetics and all the tools we have around that. I don’t know how much it will be individualized medicine, but I do know that things like heart disease, cancer, and the diseases my foundation has as a priority, that if you take a time period like 20 years, most of those will be dramatically improved, that the average lifetime will go up quite a bit, we’ll have many more vaccines than we have today. And so that’s the other sector of the world that’s moving very quickly, partly by taking advantage of software tools.

CRAIG MUNDIE: I’ll try one more question, maybe a brief comment from both of you about this one. “The World is Flat,” written by Thomas Friedman, is now a very popular book in Japan. What’s your impression about that book, and what role do you think that Microsoft and other companies like this really play in this flat world of the future?

PROFESSOR MUHAMMAD YUNUS: Going back to health issues on that one, I see health as a real challenge around the world, along with the poverty, because being poor is also synonymous with being in poor health. It’s the same story, so they go together. So, if you are addressing poverty, you are impacting on health; if you’re addressing health, you’re impacting on poverty. So you can look at it in a simultaneous way.

And we basically left the whole health issue on the shoulder of the government. That’s what generally speaking happens. And it’s not doing very well, it’s not very successful, and with the varieties of experience mostly it’s people at the bottom not being reached, despite the good intention of the governments and international programs.

How do we do that? How do we get to that? And that’s where I was coming up with the idea of creating another kind of business, social business. Health can be an exciting social business, a business to address the health issues. And in our case we are creating two hospitals right now, eye care hospitals as a social business. Cataracts are a big problem in Bangladesh; like many other diseases, cataracts are a problem. So, we are exclusively addressing the cataract patients, cataract operations. Everybody will get the service. Those who are able to pay, they pay full market price. And those who cannot afford it, we have discounted price. Even somebody who is absolutely beggar at the lowest level, she gets a treatment, too, but for a penny or something, but everybody gets the treatment.

Hospital as a whole covers all its costs. That’s a social business. Nobody is trying to make money out of this.

So, we can create a lot of those things, because it becomes institutionalized. Most of the NGOs doing like in Bangladesh, NGOs have been very effective, BRAC and other organizations in addressing this. But you need to keep on pumping money to keep it moving. It improves the health condition, but institutionalization and self-sufficiency is a very important issue in that. Bangladesh is a case where mortality, child mortality has declined. As a result, one of the reasons, the fertility rate has gone down very dramatically. It used to be 6.4 some 20 years back; today, it’s 3.0 fertility rate, in 20 years. So, how each one is connected to the other?

So, this is what — and Bangladesh is doing very well related to India, related to Pakistan, related to Sri Lanka, Bangladesh is doing very well because it’s doing very well in poverty reduction. Poverty is reducing in Bangladesh in a very systematic way, very sustained way.

So, we see the interlinks, so we need to think in a way that we can do it in a business way, in a very technology oriented way. More and more of the technology, more and more business ideas can change the situation dramatically.

CRAIG MUNDIE: Yeah, I was in India recently, and even there where you say, even though the government ostensibly has the role of providing the healthcare, even at the lowest level, most people are paying for some type of private healthcare.

PROFESSOR MUHAMMAD YUNUS: Much more, much more.

CRAIG MUNDIE: And so I think you’re right, that’s clearly an opportunity.

BILL GATES: In terms of the Friedman book, I think it’s a very excellent book and captures some of the key trends. Craig and I had a chance to get to know Tom, and talked to him as he was working on that. I sort of gave him a hard time and said, well, you know, it’s not flat for 6 billion. It used to be flat for 1 billion, and now it’s flat for maybe 3 billion. And that is a phenomenal thing, because markets in terms of drug discovery and innovations, as you scale them up from 1 billion to 3 billion, it’s more than a linear impact; it creates an acceleration of innovation of what’s going on there.

But I would say that the other 3 billion won’t get into this virtuous cycle without some creativity, including microfinance, more work on their diseases, more special work from the IT sector of what they can do.

So, I’m optimistic that some day we will be able to say the earth is flat. Now, when I said that to Friedman, he said, fine, but it’s not as good a title to say half the world is flat, and so he didn’t change that, but he put a few things in there to talk about that. In fact, Bangalore, where he had a scene in Bangalore, if you walk just about two miles from where he was sitting in that nice Infosys office, there’s a terrible slum in Bangalore. So, there are places in the world you can literally see the contrasts are still pretty stunning.

PROFESSOR MUHAMMAD YUNUS: And that’s the point I was making when I said that 6 percent of the world income goes to the 60 percent of the world’s population. That’s not a flat world. So, for those 60 percent with 6 percent income, the whole thing that we are talking about of the world doesn’t exist. So not only they are deprived, the people who are enjoying the 94 percent of the income, they’re also deprived, because the creativity of these people are not put on the table. You don’t know how much powerful those creativities were, which were rejected, undiscovered, unexplored, the great gift that each individual has in them, never that gift never unwrapped, we didn’t see what it is. So, that’s the shame. That’s where the flatness disappears.

CRAIG MUNDIE: Okay. Well, before we end, is there anybody in the audience who’d like to ask the last question? Okay, one back here.

QUESTION: Good afternoon. May I ask Mr. Gates, I heard your views about how to improve human life, but may I know how do you believe that information technology or ICT would help in mitigating climate change, the home, the very life here on earth? I’d like to know how you believe that ICT would be able to help us make this world a healthy one for all of us. Thank you.

BILL GATES: Sure. Well, fortunately climate change, although it’s a huge challenge, it’s a challenge that happens over a long period of time. And so most of the forecasts about by the year 2100 that the ocean will have risen perhaps a foot and a half, you know, we have time to work on that.

If you had said — if you’d gone back 90 years ago, and said, okay, we have this big challenge, you would have underappreciated how much things would change and improve during that time. I think it’s always possible to underestimate innovation.

In terms of energy generation, we need innovation. We need it for two reasons. One is we need it for better environmental things, but the second is we need to continue to make energy less expensive. If you’re a poor person, energy is a big deal to you. Fertilizer is energy, getting to your job is energy, food, a lot of the costs come from energy. And so only in rich countries can we say, oh, well, let’s go ahead and make energy a lot more expensive. Well, maybe in the short run in rich countries to spur innovation that needs to be done, but if you take, say, a 20-year timeframe, we need a solution for developing countries where the cost of energy is low, and it’s environmentally friendly.

Now, fortunately there are many sources of energy that could do that, and right now we have the marketplace in its normal kind of crazy way with lots of startups and ideas, and there’s maybe 100 ideas being pursued. In the solar area there are dozens. In the geothermal area, wind, there are nuclear designs that to me look very exciting. They won’t come overnight, but they’ll have safety and low-cost capabilities.

And so I think we have to see how can we foster these new energy technologies without having the developing world pay a short term price where already today millions are dying and they’re in a very deprived situation, and that in many ways is far more acute than even the problem that you’re looking at 40 or 50 years from now.

And so it’s always easy in the rich world to get things out of balance. People in the rich world know about SARS, what a terrible disease SARS was. Well, you know, in five minutes malaria kills as many people as SARS killed in all time. Now, you just don’t read about it in the newspaper because it’s poor people dying and they’re dying every day. And so we have to think, okay, some tragedies are happening right now. It’s up to the rich world to be more generous in helping with those things, while at the same time driving the innovation. So, to be honest, I’m very optimistic that we’ll have those innovations.

In the near term the IT industry is doing things with better power management capabilities where machines can shut down. We’ve had to learn a little bit about this because of battery life of portable machines, but what we’re doing now is we’re taking those techniques and applying them to desktop and server, and so we can reduce energy in those areas as well. The best we’re going to do though for IT technology within the sector is be pretty flat in terms of any energy usage.

Now, our impact in terms of reducing the need for travel, allowing people to get information without having to make paper or trips or things that really are very energy intensive, that’s really where we’ll have the greatest impact.

PROFESSOR MUHAMMAD YUNUS: Can I just add?

CRAIG MUNDIE: Sure. You have the final word.

PROFESSOR MUHAMMAD YUNUS: Bill, whatever it is to be done is to be quick for us in Bangladesh. Bangladesh is a country which is at the level of most of the sea level, very little high ground in Bangladesh. If the sea level rises with the global warming, climate change, millions of people in Bangladesh will be affected, because part of Bangladesh will go under water. And the remaining part, which will not go under water, their agriculture, their whole likelihoods will be threatened. So, with 145 million people in this tiny little piece of land, with the global warming shaking it up, it will be a terrible disaster of no going back. It’s not a flood that comes and disappears; it’s something kind of one way traffic.

CRAIG MUNDIE: Either that or you’ll have to learn from the Dutch.

PROFESSOR MUHAMMAD YUNUS: No, the Dutch can’t teach us on this one. The Dutch was not fighting the global warming.

So, the point I’m making, that the whole lifestyle has to change. This is not a sustainable lifestyle that we are promoting in rich countries. So, we have to address that issue very quickly, what kind of lifestyle it is, because today this is seen as the lifestyle, so everybody else is emulating, like China is coming that direction, India is coming that direction, Bangladesh is moving in that direction. Unless those things are changed, we said this is not sustainable, we have to make a drastic turnaround, be careful about what we do. This is not going to disappear very easily, even if you put the brakes today. Still the whole momentum of it will take us a long time. So, we need to do very, very serious intention into it and take action on that.

CRAIG MUNDIE: Thank you. Thank you very much to Bill and Dr. Yunus, and I hope you enjoyed the comments, and thanks for your attention. (Applause.)

GERRI ELLIOTT (Microsoft Corporate Vice President, Worldwide Public Sector): Thank you so much, Bill and Craig, and very, very, very special thanks goes to Dr. Yunus, whose absolutely innovative efforts have impacted thousands of people, not only in Bangladesh but elsewhere, and his groundbreaking model of economic empowerment is exactly the kind of initiative that we’ve been talking about here for the last two days that we hope will sustain and broaden the reach of economic growth in this region.

I want to thank all of the speakers that we’ve had over the last day and a half. Each and every one of them has made a unique contribution to this conference, and to extending prosperity and opportunity in Asia. And we thank them for sharing their ideas and the lessons that they learned.

And, of course, we want to extend a very special thanks to our Chinese hosts for welcoming us so warmly in this wonderful city of Beijing. We wish you continued prosperity, and all the best for next year’s Olympic games. We know this dynamic city and this country will shine brightly for all the world to see.

We had a number of goals for this forum that we shared with you in the very beginning, to give you all a chance to network and share best practices, to talk about some of the key challenges that you all face in this region, and to give you some takeaways and some practical ideas that you can hopefully implement in your country.

I hope we succeeded in fulfilling those goals, and that hopefully we made some small contribution to the conversation and the way ahead in Asia.

We look forward to continuing the discussions that we started here, and to deepening the new friendships that have emerged. And we look forward to furthering our partnerships to help you empower your countries, your institutions, and your people.

So, on behalf of Microsoft and my entire Worldwide Public Sector team, we send you off with many blessings, and we wish you safe passage home. Thank you very much. (Applause.)